934445--4/15/2010--ACL_SEMICONDUCTOR

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The restatement of our financial statements may result in litigation or government enforcement actions. Any such action would likely harm our business, financial condition and results of operations. Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes Oxley Act of 2002 may result in actions filed against us by regulatory agencies or in a reduction in the price of our common stock. If our relationship with Samsung is terminated, we may not be able to continue operations. If the growth rate of either memory products sold or the amount of memory used in each product decreases, sales of our products could decrease. If Samsung is unable to respond to customer demand for diversified semiconductor memory products or is unable to do so in a cost-effective manner, we may lose market share and our results of operations may be adversely affected. If Samsung s manufacturing process is disrupted, our results of operations, cash flows and financial condition could be adversely affected. We are heavily dependent upon the electronics industry, and excess capacity or decreased demand for products produced by this industry could result in increased price competition as well as a decrease in our gross margins and unit volume sales. The memory product industry is highly competitive. Current economic and political conditions may harm our business. We believe that we will require additional equity financing to reduce our long-term debts and implement our business plan. Our major stockholder controls our business, and could delay, deter or prevent a change of control or other business combination. Our stock price has been volatile and may fluctuate in the future. If additional authorized shares of our Common Stock available for issuance or shares eligible for future sale were introduced into the market, it could hurt our stock price. If penny stock regulations impose restrictions on the marketability of our Common Stock, the ability of our stockholders to sell shares of our stock could be impaired. Section 203 of the Delaware General Corporation Law may deter a third party from acquiring us.

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934445--4/15/2010--ACL_SEMICONDUCTOR_INC